Cumulative total indexes are known in the art. Cumulative total indexes are constructed as the summation of a series of financial values, or values of economic significance, observed over a specified time period. Examples of cumulative total indexes include the indexes that underlie various current or historical futures contracts. Dividend index contracts, as currently offered on EUREX, are constructed as the cumulative total of dividends accrued by the stocks that comprise a stock index. CME heating degree days (HDD) and cooling degree days (CDD) futures are settled against indexes that cumulate temperature readings over a specified period. Fed Fund futures traded at CME are based upon the arithmetic average effective overnight Fed Funds rate observed in the marketplace. Since the arithmetic average is equivalent to the sum total of the observed values divided by the number of observations, the latter being a predetermined number, the contract is effectively based on the cumulated sum. Reference to a cumulative index of ex post values may tend to obfuscate the economic variable that is being traded.
In addition, weather futures contracts are known in the art. Such weather derivatives make weather a tradable commodity. Therefore, allowing particular risks related to the temperature and other forces of nature to be managed and hopefully mitigated. The Chicago Mercantile Exchange (CME) offers exchange-traded weather derivatives that are standardized contracts traded publicly on the open market and reflect, through specific indexes, monthly and seasonal average temperature in over a dozen U.S. and European cities.